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Knowledge accumulation in US agriculture: research and learning by doing

Author

Listed:
  • Sansi Yang

    (Renmin University of China)

  • C. Richard Shumway

    (Washington State University)

Abstract

We investigate the role of public research investment (R&D) and learning by doing (LBD) in improving productivity through an empirical examination of the US agricultural production sector. We construct a dual model and track R&D and LBD impacts on returns to scale, production cost, and input demand utilizing data for more than a century. A Bayesian approach is used to maintain regularity conditions implied by economic theory. We find that US agriculture shows significant evidence of increasing returns to scale when both R&D and LBD are included in the production process. R&D and LBD are complementary in reducing cost as an increase in one stock significantly strengthens the cost-reducing effect of the other. The direct impacts of R&D and LBD on scale economies, cost, and input demands are sensitive to choices of R&D lag structure, LBD proxy, LBD knowledge depreciation rate, and data period. But input demand price elasticities are highly robust across model specification.

Suggested Citation

  • Sansi Yang & C. Richard Shumway, 2020. "Knowledge accumulation in US agriculture: research and learning by doing," Journal of Productivity Analysis, Springer, vol. 54(2), pages 87-105, December.
  • Handle: RePEc:kap:jproda:v:54:y:2020:i:2:d:10.1007_s11123-020-00586-6
    DOI: 10.1007/s11123-020-00586-6
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    More about this item

    Keywords

    Cost function; Input demand; Knowledge accumulation; Learning by doing; Research investment; R&D;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services

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